Professional Documents
Culture Documents
Seven
Strategy in
HighTechnology
Industries
High-Technology Industries
High-tech industries are those in which the
Technology is:
The body of scientific knowledge used
in the production of goods or services
Accounting for an even larger share
of economic activity
Revolutionizing aspects of the
product or production system in
industries not thought of as high-tech
Technical Standards
and Format Wars
Technical standards are a set of technical
Format wars
Often, only one standard will
come to dominate a market.
Many battles in high-tech industries revolve
around companies competing to be the one
that sets the standard.
Technical Standards
for Personal Computers
Figure 7.1
Benefits of Standards
Standards emerge because there are
economic benefits associated with them.
Standards help:
Guarantee compatibility between products and
their compliments
Reduce confusion in the minds of consumers
Reduce production costs through massproduction
Reduce the risks associated with supplying
complementary products and help
Standards lead to both low-cost and differentiation
advantages for individual companies.
Establishments of Standards
Standards emerge in one of three ways:
1.
2.
3.
Positive Feedback in
the Market for VCRs
Figure 7.2
Cost Structures in
High-Technology Industries
Figure 7.3
Managing
Intellectual Property Rights
Intellectual property rights apply to the
Encryption software
Vigorous defense of intellectual property rights
First-Mover Advantages
The five main sources of first-mover advantages:
1. Exploit network effects and positive feedback loops
Locking customers into its technology
First-Mover Disadvantages
1. Pioneering costs
To develop technology and distribution channels
and to educate the customers
Later entrants free-ride on first-movers investments.
Going it alone
2.
3.
Swarm of Successor
Technologies
Figure 7.7
Disruptive Technology
Disruptive technology is a new technology that